BUSINESS BAN WITH HAMAS-LED P.A.

US business ban on Hamas-led PA.

Ismail Haniya's administration was sworn in last month. The United States has banned its nationals from doing business with the Hamas-led Palestinian Authority, a Treasury spokesperson says. The Treasury ruled this week that the militant Islamist group has a vested interest in the transactions of the Palestinian Authority. That decision made the PA automatically subject to existing US bans on doing business with "terrorist entities". The US and EU cut off aid to the PA after Hamas took power on 30 March.

Palestinian Prime Minister Ismail Haniya said on Friday the cut in aid would not weaken the Palestinian people's resolve. "We will eat salt, but we will not bow our heads for anybody other than God, because we are faithful to the rights of our people and our nation. We will not betray it," he said. Mr Haniya was addressing worshippers in Gaza before the start of a series of rallies aimed at demonstrating support for the Hamas-led administration. Thousands of Palestinians in the West Bank and Gaza rallied in support of their new government.

The US and EU consider Hamas a terrorist group. "Hamas is a designated terrorist group" under three different sets of regulations, Molly Millerwise of the US Treasury Department said. "As a result, US persons are prohibited from engaging in transactions with the PA unless authorised by the Treasury's Office of Foreign Assets Control." The US is making exceptions for government entities under the direct control of Palestinian Authority President Mahmoud Abbas, a moderate whose Fatah movement is a rival of Hamas. The ban also does not forbid Americans from doing business with non-governmental organisations or private sector banks, among other exceptions.

Also on Friday, another Hamas leader warned that if the party's government was broken by its enemies, Hamas would go back on the offensive. Younes al-Aftal, a Hamas MP, said there would be Hamas suicide bombings again in the heart of Israel. This is the first time a prominent Hamas leader has talked in these terms since the Hamas-led Palestinian cabinet was sworn in two weeks ago. Hamas has carried out nearly 60 suicide bombings in Israel since the start of the second intifada in 2000. It is currently maintaining a ceasefire, but remains committed to the destruction of Israel.

BBC NEWS REPORT.